Wisconsin Review Commission Report
on the Track Records of Exxon and Rio Algom

The Wisconsin Review Commission panel, composed of Wisconsin
civic leaders, heard testimony on the track records of the two
mining corporations Exxon Minerals and Rio Algom at a hearing
on June 18, 1994, at the Mole Lake Chippewa Reservation, where
the two companies are planning the Crandon zinc-copper mine.
The report's release was on March 24,1995 - the 6th anniversary
of the Exxon Valdez disaster.

Thanks to Tupac Enrique for Spanish translation, and to the Indigenous Environmental Network and Midwest Treaty Network for facilitating testifiers' travel.

INTRODUCTION

BACKGROUND on the COMMISSION

The Wisconsin Review Commission (WRC) is a project enabling the public
to track the activities and records of corporations operating in our
state. The purpose of the panel - which represents a cross-section of Wisconsin civic leaders - is to meet and hear public testimony about the activities of firms based in or operating in Wisconsin.

The WRC citizens' panel has members from state government, tribal
government, labor, churches, farmers, small business, sport/recreation
interests, women's groups, environmental organizations, civil rights
groups, high school students, and international residents (see the
listing below). The panel will draw up reports that are distributed
to the media, government officials, and the public.

The WRC operates as a non-governmental 'watchdog' over practices of
corporations operating inside Wisconsin, and the track records of the
same companies outside our state. It seeks to educate Wisconsinites
about the impact of corporate decisions on their lives, and issues
recommendations pertaining to those impacts. While large companies
have the financial means to present their perspectives, few public
resources are put into examining other possible angles on their
proposals. The WRC is one avenue that citizens have at their
disposal to look at the "other side of the story" - in particular the perspectives of others who
have already experienced company practices.

Hearing on Exxon and Rio Algom

The Wisconsin Review Commission held a testimonial hearing on two
mining corporations on June 18, 1994, at the Mole Lake Sokaogon
Chippewa Reservation, near the town of Crandon in Forest County.
Secretary of State Douglas LaFollette chaired the session of the
Commission. The WRC panel heard testimony on the track records of
Exxon Minerals Co., and the Canadian mining firm Rio Algom. The two
companies are jointly proposing a zinc-copper sulphide mine on land
adjacent to the June 18 hearing site, through their wholly owned
subsidiary Crandon Mining Company (CMC).

Testifiers were from areas directly affected by previous Exxon or Rio
Algom operations, such as Colombia, Alaska, Ontario, and New Mexico
(see the listing below). Testimony focused on the Exxon Valdez oil
spill, coal and uranium mining, metallic mining, oil drilling, and
other subjects. Panelists had an opportunity to ask questions of
testifiers, whose comments were incorporated into sections of this
report. Crandon Mining Company officials were later given a chance to
review and comment on the initial draft of this report.

Report criteria

This report concentrates not on the general histories and practices of
Exxon and Rio Algom, but on the aspects of their track records that
may pertain to their proposal for the Crandon mine. The public
concerns over the mine can be roughly divided into four categories:

 First, would the mine be safe for the environment? The Crandon
Mining Co. contends that the mine will be constructed in such a way as
to ensure safe operation, while opponents fear negative impacts on
surrounding groundwater and downstream waterways.

 Second, would the mine help Wisconsin's economy? The Crandon Mining
Co. foresees adding to local employment and financial stability, while
opponents contend that mining operations have brought instability to
local economies, especially those reliant on resources or tourism.

 Third, will the mine detrimentally affect Native American culture?
The Crandon Mining Co. promises to work together with the affected
tribes, while some tribal leaders have voiced fears for wild rice beds
and cultural sites.

 Fourth, how do resource extraction projects affect Wisconsin's
institutions of democracy? The companies assure citizens that they
will be responsible neighbors, while opponents point to alleged undue
influence of mining firms over the governmental process.

There are many conflicting opinions over the Crandon mine controversy.
These will not be examined in depth in this report. But since the
major points of this controversy revolve around impacts on the
environment, the economy, indigenous cultures, and the democratic
process, it is fair for the WRC to examine the companies' track
records using these criteria. This report is divided into these
four sections, followed by a listing of panel recommendations.

COMPANY
HISTORIES

(Note: Since this report was issued, J. Wiley Bragg has been replaced as public relations director by Rio Algom official Richard Diotte, and Jerry Goodrich was replaced as CMC President by Rodney Harrill, an Exxon official who
formerly headed the Carter Mining Co. in Gillette, Wyoming.)

Exxon

Exxon is the nation's largest and the world's second largest oil
corporation (after Royal Dutch/Shell), and is headquartered near
Houston, Texas. Founded in 1863 as John D. Rockefeller's Standard Oil
Company, it later changed its name to Esso and, in 1972, to Exxon.
Its divisions and affiliated companies operate in more than 80
countries. In 1993, the company earned $5.3 billion in profits and
$111 billion in revenues. In recent years, Exxon has recorded higher
production earnings than any competitor (Wall Street Journal,
9/19/94). Its 1993 revenues alone are larger than the Gross National
Products (GNPs) of 165 out of the world's 192 independent countries
(Britannica Book of the Year 1994, pp. 792-96). Most of Exxon's
sales come from production, refining, and transportation of oil. The
value of Exxon's energy reserves in the U.S. alone, based on the 1980
world oil price of $33 a barrel, exceeds $1.3 trillion (Bartlett,
Philadelphia Inquirer, 12/7/80).

Exxon is also one of the world's biggest producers of coal, uranium,
copper, and other minerals. It entered the mining industry in 1965
by buying up privately owned coal fields in the U.S. Exxon's
principal foreign coal reserves are in northern Colombia, South
America, where one-half of all Latin American coal reserves are
located. The El Cerrejón mine is one of the richest coal fields in
the world, located in the middle of the Wayuu (Guajiro) Indian region.
A national furor arose in 1980 over the Colombian government's
giveaway of the coal to Exxon's wholly owned subsidiary, the
International Colombia Resources Corporation (Intercor). Officials
of the Colombian state agency Carbocol resigned in protest over the
agreement (Colombia Report, p. 10). The mine became a major issue in
the 1982 Colombian presidential election. (Gutierrez, p. 72) Crandon
Mining Co. President Jerry Goodrich was Vice President of Operations
at El Cerrejón.

Founded in 1980, Exxon's wholly owned subsidiary Exxon Coal & Minerals
Co. sank approximately $760 million in five years into copper and
other minerals. Exxon invested heavily in copper mining in Chile,
only five years after a military junta overthrew a democratically
elected government. From 1968 to 1984, it also invested heavily in
uranium mining. It leased Indian lands in the Southwest for uranium,
and in 1972, it began operation of one of the largest uranium mines
and mills in the U.S., at Highland, Wyoming (Cook, Forbes, p. 72).
Crandon Mining Co. public relations official J. Wiley Bragg was at the
forefront of similar but failed efforts to secure uranium leases in
New Jersey and northeastern Minnesota in the early 1980s. (Duluth
News Tribune, 2/25/81, New York Times, 8/24/80)

Following Exxon's 1975 discovery of a major zinc-copper deposit next
to the Mole Lake Sokaogon Chippewa Reservation, the Engineering and
Mining Journal suggested that "Exxon may become a significant producer
of copper and zinc at facilities based on the massive sulphide deposit
discovered by the company at Crandon, Wisconsin (Neesham, p. 55).
Exxon USA described the deposit as possibly one of the ten largest
known metallic deposits in North America (Dorgan, Capital Times,
5/14/76). The deposit rests at the headwaters of the Wolf River
watershed, a large drainage area that supports unique and delicate
habitats, such as trout streams, wetlands, and wild rice lakes.
After facing a decade of strong local opposition, Exxon withdrew from
the project in 1986, citing depressed metal prices. In August 1992,
Exxon Coal & Minerals announced a partnership with Phelps Dodge Mining
Co. to reopen the Crandon project, but Phelps Dodge withdrew after
only four months. In September 1993, Exxon announced its intention
to mine with a new partner - Canada-based Rio Algom - in their newly
created partnership, the Crandon Mining Company .

Rio Algom

Rio Algom is a Toronto-based mining company with interests in copper,
molybdenum, coal, tin, potash, uranium, as well as an international
metals distribution business. Until 1992, Rio Algom was a Canadian
affiliate of the world's largest mining company, the London-based Rio
Tinto Zinc (RTZ) corporation. In 1955, RTZ acquired a substantial
interest in several Ontario uranium mines near the north shore of Lake
Huron, collectively known as Elliot Lake. During the U.S. nuclear
weapons buildup of the 1950s-60s, there were 12 mines in the region
employing over 10,000 workers (Kilgour). These mines were combined
under Rio Algom mines in 1960, and over the next 30 years were
identified with one of the world's most notorious controversies over
radioactive contamination of the environment. In 1990-92, the
share of copper in the company's mining profits rose from 31% to 42%,
while uranium slipped from 54% to 31% (Northern Miner, 4/5/93).

In 1991, Rio Algom set aside $80 million to cover the cleanup costs at
the abandoned Elliot Lake uranium mines. The following years RTZ
sold its 51.4% stake in Rio Algom, explaining that it wanted to avoid
competition with other North American interests such as its Kennecott
Copper affiliate (operator of Wisconsin's Ladysmith mine). However,
a number of industry experts interviewed by the Canadian mining
newspaper The Northern Miner say that more important are "the
potential liabilities related to the decommissioning of Rio's Elliot
Lake, Ontario uranium mines". (7/13/92).

Alaska After assuring Congress they could handle a possible spill
emergency in Alaska, Exxon went about scrapping some safeguards, and
never even built some others it had promised. When 11 million gallons
of oil were spilling into Prince William Sound six years ago, Exxon's
J. Wiley Bragg was there - not there to help, but to manage public
relations (his initial job at Crandon Mining Co.). When Bragg said
Exxon did not have enough containment booms to prevent the spill from
spreading, the manager of emergency services in Seldovia threatened to
arrest him, saying, "I personally feel that every Exxon employee
should be brought here and put in a jail cell." President Bush's
Secretary of Transportation said, "The industry response to the Valdez
spill was zero on a scale of one to ten."

Colombia Exxon's huge coal mine - the largest in South America - was
managed by Vice President of Operations Jerry Goodrich (the first
Crandon Mining Co. president). The El Cerrejón mine has brought
well-documented damage to the semi-arid region, including coal dust
contamination, groundwater loss, and a fatal miners' illness .

Ontario Serpent River Ojibwe band councillor Keith Lewis testified on
Rio Algom's Elliot Lake uranium mines. He said the Serpent River used
to be one of the greatest sturgeon producing rivers in the province,
but that ancient fish has all but disappeared due to radioactive and
heavy metal poisons from the mines, and the only reason walleye are
still present is that the river is stocked for sportsmen.

Wyoming Exxon's Highland uranium mine tailings pond was criticized by
the state Department of Environmental Quality for numerous
infractions. Jackrabbits nearby absorbed 26 times more radiation per
pound than recommended levels for humans.

Colorado After the largest spill of radioactive uranium oxide in
history, Exxon employees arrived on the scene. According to state
officials after the 1977 spill, Exxon employees were not only
improperly instructed, but inadequately trained and equipped for their
clean-up mission.

Impacts on the Economy

Colorado In 1982, 2000 construction workers heard on the radio that
they were laid off from a multibillion-dollar oil shale project, due
to poor financial planning by Exxon.

Nova Scotia Rio Algom has still not cleaned up its East Kemptville
tin mine, posing a threat to the multimillion dollar lobster industry.
Exxon laid off miners when its Gay Mills lead-zinc mine closed
prematurely in 1981.

Alaska Native Eyak fisherman Dune Lankard testified, "I never
believed once that anyone could ever kill the ocean. So when it
happened, I was in shock. How do you compensate somebody for taking
everything away from you?" Commercial fisherman lost millions from
cancelled salmon and herring runs; 1994 net permits cost one-sixth the
pre-spill permits. Exxon was fined $5 billion in punitive damages
for economic losses from the spill.

Ontario Lewis testified that he is one of many former Elliot Lake
miners who now have serious health problems such as asthma,
bronchitis, or cancer. The provincial Health Ministry admits the
miners' lung cancer rates are 300 to 500 percent above that of the
normal population.

Impacts on Indigenous Cultures

Colombia Exxon's El Cerrejón coal mine has earned it a place on
Survival International's Top Ten list of the corporate violators of
Native rights. Wayuu Community leader Armando Valbuena Gouriyú
testified that the mine has brought cultural devastation to the Wayuu
(Guajiro) Indians - including the excavation of cemeteries for a rail
line - while providing few jobs to the Native people.

Ontario Rio Algom (along with its parent company Rio Tinto Zinc) is
also on the Survival International Top Ten list, because of its Elliot
Lake uranium mines. Lewis testified that the company blasted a
spiritual site, and added, "They have given money to the white
municipalities which have a larger population... They say to the people
of Serpent River who live downstream.... you people are crazy."

Alaska Exxon once told the natives of Alaska that the oil industry
would have a positive effect on "the unique environmental conditions
of the tribes." Lankard testified, "After the Exxon Valdez spill,
Exxon said - 'We will make you whole again'. No one has made us
whole." Government studies showed that within a year after the
spill, subsistence harvests had declined 77 percent in 15 Native
communities. The Eyak criticized Exxon for desecrating cultural sites
and human burials during the clean-up.

Impacts on Democracy

Chile Exxon was the first multinational to make a mining deal with
the military junta, which had violently ousted the elected government
five years before.

Colombia Gouriyú, a former Exxon employee and union official at El
Cerrejón, testified, "I know Exxon very well in Colombia. Exxon will
follow the law; they made the law in Colombia." On three separate
occasions, Exxon got the government to call in troops and armored
vehicles against strikes by its employees. Workplace organizers like
Gouriyú were fired after they brought up safety concerns.